4 min read Meet the Man Who Started the First-Ever Property Management Franchise

21 September, 2015

When Kirk McGary first got into property management in 1983, he had no grand ideas of building a national brand. He was a college student looking to escape his pizza-delivery job yet still pay the bills. So when some friends invited him to join their property management business, he jumped in. McGary went on to start his own company, Real Property Management, in 1986.

It wasn’t until years later that he saw the business’s true potential. “I looked around the country and said, you know, nobody’s really doing this on a national level,” McGary recalls.

He opened multiple offices before turning to franchising in 2005. Property management was not a service that had been franchised before, and being first paid off. Today, Salt Lake City-based Real Property Management has nearly 300 units across the U.S., and McGary doesn’t see the company stopping there. “We can easily open another 1,500 to 1,800 locations,” he says.

Now there’s more competition to contend with—several other property management franchises have started up—but McGary is not fazed. “The other companies haven’t been in the trenches for 20-plus years like I have,” he says. “I’ve shown houses; I’ve cleaned toilets. We really understand property management.”

We talked to McGary about how he pioneered one of franchising’s hottest new industries.

After almost 20 years in business, why did you decide to franchise?I had multiple offices in Utah; we’d just expanded to Idaho; and I was on a plane flying out of L.A., where we planned to open another. I got to thinking, If I personally own every office, I will never have a life again; I’ll just live on Delta Air Lines. There has to be a better way. So I talked to my partner, Doug Oler, who’d been a multi-unit H&R Block franchisee, and he suggested franchising. It had never occurred to me before, but after some research I realized it was a great solution.

What were the challenges of introducing a concept that hadn’t been franchised before?It was tough. For the first couple of years, we focused on conversions. I assumed we could go to any property manager and say, “Look how great our model is. Here, sign our contract.” That wasn’t working. Then we went to a trade show that had nothing to do with property management, and we sold a franchise in the first 10 minutes. That’s when I realized we just needed to get good businesspeople and not worry about whether they had property management experience. Once we did that, the game totally changed, and we started selling.

What qualities did you learn to look for in franchisees?Franchisees are collecting millions of dollars in rents and deposits, so integrity is most important. Second is work ethic. This is a tough business. You’ve got tenants demanding things on one side and owners who don’t want to spend much money on the other, and we’re in the middle, playing referee.

Franchisees also have to be good problem-solvers. Properties burn down, tenants want to go to court. and owners want to raise rent. It’s on-your-toes problem-solving.

The recession hit shortly after your franchise sales started to take off. How did that affect you?When friends would ask, “How’s your business doing in the recession?” it was hard not to smile. Recessions really don’t hurt us. They actually help us. When properties won’t sell or values go down and people have mortgages to pay, their next alternative is to rent the property out. So the number of properties we manage increases quicker during a recession.